Even the Best Business Ideas Fail Due to These Critical Mistakes

I remember hanging up the phone, turning the call off speaker and looking around the table at my team. The sad looks in everyone’s eyes said it all….it was over. Our dream to make the next great computer game was dead, and we had no idea where to go from there.

We had all poured our blood, sweat, and tears into it. I was burning the midnight oil. Between school and baseball, I struggling to get my part of the work done (writing the story and script, level design).
We had just finished a conference call with our last investor opportunity, and like the previous conversations, things did not go as well as we had hoped. They had questions that we, apparently, did not have the correct answers to.
Looking back, we were kids in way over our heads. While there are the great stories like Dell, Gates and Zuckerburg – this was not going to be one of those stories.
Looking back, we certainly made a lot of mistakes, mistakes that I later learned from in my future business dealings that included one win and another failure.
Everyone makes mistakes.
Now that I’ve stated the obvious we can move on and get more specific.
Every single entrepreneur that you follow, whose podcast you listen to, whose blog post you read, and who had a feature article in this month’s Entrepreneur. They all have one thing in common: they have made mistakes.
Think about those mistakes that so many people voice daily. Chances are you’ve heard some of them:
“I went to the wrong college.”
“I didn’t check the correct ROI for law school.”
“I went to school for X just because my parents told me it would be a great idea.”
We hear things like this every day. People who did things that they eventually realized were not the best decisions. Some will say the key to surviving the mistakes is being able to takeaway lessons and know what you should do right next time.
However, top players know that the best way to learn is to learn from someone else’s mistakes rather than learn from their own.
Hacking your way through some of the common problems that other people go through when starting a business cuts down so much of your own time. Below are some of the most common mistakes that new entrepreneurs make when starting a business and tips on how you can avoid making them (I have made or done all of these in the starting of multiple businesses in my life…not just with the video game business…all of them).

Mistake #1 Not Solving an Important Problem

Creating a business is more than just creating a product or service you are passionate about and selling it to people. Just because you create something does not mean that there will necessarily be a demand for it. Sometimes the same idea/offer can be a non-starter for one group and a huge hit with another (we’ll get to that down below).
When I was operating my financial brokerage I really had 2 main products: investments and life insurance. And these two options really highlight the differences between a (perceived) luxury and a pain point (a problem that creates stress).
The best way to create a successful product is to make one that solves a problem. And the best problems to solve all have specific pain points that need to be fixed.
People stay up at night wondering how they’re going to retire, or how they’re going to pay for their kid’s college education. People do not stay up at night wondering how to replace their income in case they die.
You would be amazed at the ways we had to attempt to prove the necessity for life insurance policies.
We would draw pictures to offer different possible scenarios. I remember a particular picture we painted for a couple debating life insurance: we drew out their life situation and then killed off the husband (you ALWAYS kill off the husband). Then we asked them how their financial situation would be without that income coming in, and that’s when they realized that they needed life insurance. That was how we were able to create that pain point.
But even after that, some clients just did not care; they did not think they needed a life insurance policy.
It’s not that life insurance is not important (life insurance is actually VERY important), it’s just not a pain point for most people. Not many were worried about it. To some, it’s just another monthly expense, an unnecessary bill that they have to pay every month.
 
To avoid this mistake you should focus on an area of business in one of the more popular pain points. Most successful products and services can fall into one of these 3 key areas that take up approximately 90% of top niches.
1) Money (including wealth management/personal finance, investing, business, careers and entrepreneurship). Some examples here include sites such as: Ramit Sethi’s IWillTeachYoutoBeRich.com for Personal Finance and Entrepreneurship, Eben Pagan’s GetAltitude.com for Internet Marketing, and JD Roth’s GetRichSlowly.com.
2) Relationships (including dating, marriage improvement, romantic relationships/dating, social circles and networking). This includes everything from The Social Man for dating (where else would you go?) to Keith Ferrazzi’s world famous Networking book “Never Eat Alone” and John Corcoran’s Smart Business Revolution for personal and business networking.
3) Health (including diets & cookbooks, workouts, weight loss and mental & spiritual health i.e. meditation). This one might be the most open ended. You go could follow anything from Dr. Oz and his books and products, to all kinds of cookbooks, all the way to P90x or Shaun T’s Insanity.
So when you’re looking for people’s problems and what to solve, look to solve something that falls into one of these three niches. Just doing that will increase your odds exponentially compared to something outside of those niches.

Mistake #2 Trying to be Everything to Everyone

Get clear and specific about who you want to help first. Once you actually get good at your craft (think 80/20 here) and prove you can help out your specific customized Ideal Client Avatar (ICA), you will see that others who are outside your designed set of clients will begin to seek you out, because once you prove you can help one group of people do something, people with the same problems (but not in your group of potential fans) will seek you out to help them.
So I completely understand what you’re going through right now trying to start up your business and get whatever clients you can.
It’s simple human nature that we want everyone to like us. We want everyone to WANT to work with us and then WE get to pick who we want to work with, not vice versa, but that’s how you get stuck with a very frustrating client list.
The reality is that no matter what we do, we cannot authentically have everyone like us. And I say authentically because when you try to be everything to everyone, you have to lose pieces of yourself and be the “safe” version of you, not the real version.
You give up what you actually stand for. Who you actually are. You basically give up your entire identity and you get lost in the shuffle.
The best thing you can do is recognize who you are, what you stand for and try to find the type of people that will resonate with you, your business, and your product/service.
To discover your ICA you need to ask yourself some high level questions to determine exactly who you are dealing with:
– How old are they? (Give an age range)
– Are they male or female?
– What do they do for a living? Are they already an entrepreneur?
– What do they like to do for fun?
– What is their pain point? What keeps them up at night?
– Where do they live?
– What are their goals and dreams?
Once you know the answers to these questions you can start tailoring your content, marketing, and offerings to them.

Mistake #3 Not Being Different

When starting a new venture, there are usually other players in your niche that will be better than you.
Whether you’re opening up a restaurant or starting a blog, someone is going to be in your niche and have good content, good products and a good audience. People see someone having success doing something and they try to copy it. They take their style, their design and their content. This seems like a good idea, but it’s actually a much bigger problem than you think.
When people come to your blog/site the first question they’re going to ask themselves is:
“Why should I spend my valuable time on this site?”
I’m going to be completely honest with you here: Most of the content you see on blogs in your niche will have similar content, similar solutions, and similar topics. So naturally you’re probably thinking “what makes my blog special?” The answer to that question is more obvious than you’d think.
It’s you.
Your personality, your writing, your story, no one can copy who YOU are. That will always be your biggest advantage. That’s why you need to know your ICA. You find an ICA that is going to resonate not just with your idea/product/service, but with you as a person. People buy from people they know, like and trust.
You need to be you. You need to take things you like, things in your background, things that you LOVE to talk about and tie it into how you deliver your content.

Mistake #4 Not Listening to Your Customers

You could create what you think is the greatest thing in the world, but if the market (aka your prospect customers) don’t agree, then you have NOTHING. The only thing that matters is what your potential customers think.
That is why you ask them.
Some things you might want to consider asking:
– What types of problems are you having with X?
– What would your life look like if X was solved for you?
– Why is it so important that X get solved?
– What have you done to try and solve X before?
– How often do you think about X?
And the best part? These answers will give you “breadcrumbs” to follow that will let you get even deeper into each question. Your prospect will lead you where they want you to go, so that you can actually help them.
And here’s something very important when taking business validation feedback:
Do not just take the validating responses, the real gold is in the negative responses. If you can fix what comes out of the negative responses, you can turn people from the negative response group into paying customers.

Mistake #5 Having A Fear of Failure

Fear is an interesting aspect of starting a new venture.
It’s one of those things that we just rarely talk about with other people in general, at least not our true genuine fears like “am I good enough?” or “I always screw things up.” Instead, we let those things bounce around in our heads like a tennis match, going back and forth with your positive thoughts. Either way, the end result is exhausting. It’s a game that you can never win.
We all have gone through this kind of thinking in the past.
The reality is we are always worried about failing at one time or another. We ask ourselves questions such as:
What if this goes badly?
Will I lose a ton of money or go bankrupt?
What will happen to my family?
What will my friends think of me? Will they ridicule me?
These are the things that I had thought every single time I started a venture. EVERY. SINGLE. TIME.
When I first started out with my first entrepreneurial venture (the computer game) it kept me up at night. I don’t think I’d ever been more nervous. So please, if you take nothing else from this, know that these feelings are normal and should be expected.
It was exhausting, draining, and most importantly, it did nothing to help me actually perform up to my capabilities.
The average person lets that fear of failure paralyze them into not doing anything, but not us. We TSM readers know how to take action. We take that nervous energy and we channel it into something that we can tap into and produce.
That is EXACTLY what I want you to do here.
Babe Ruth, one of the greatest baseball players of all time once said “Don’t let the fear of striking out keep you from playing the game.”

Bonus Mistake: Never Getting Started

While I listed this as the bonus, it is the #1 problem people face when starting a business for one simple reason: you cannot build a successful business without actually STARTING to build a business.
I understand that it can be hard to get going, especially when you feel like you don’t know enough about your niche to start a business.
I’m going to give you the secret to learning enough before you start a business:
YOU WILL NEVER KNOW “ENOUGH.”
Just like when you were playing sports growing up, you knew you were always a student of the game, always learning new things. I learned more about baseball in college than I did my first 18 years on earth…and that was after playing the sport competitively for a decade and a half! So just think about how long you’ll be learning something that you’re starting now in your 20s and 30s.
And that’s a GOOD thing.
If you’re not learning, you will not have the most up to date information on how to create, develop, and grow your business.
So what’s my point to all this?
Go play the game, don’t just read about it.